Think of all the times that merchants have ripped people off. Sometimes it’s a line-item that jacked up your bill. You called and complained, but you eventually gave up and ate the $3.50 after making four phone calls without satisfaction.
Sometimes, you bought an appliance and after getting home discovered that it wasn’t as it was promised, but the merchant refused to take it back.
Or it might be a $1,000 piece of electronics. Only after the warranty expired, it became clear that it didn’t function as promised.
Maybe it’s a used car that you bought for $2,500 and right after driving it off the lot you discovered that it literally wouldn’t go, certainly not at highway speeds, and that the dealer knew of the problem but refused to refund your money.
Consider the many complicated financial transactions you’ve signed, credit cards, car loans, or payday loans. What do you do if you notice you’ve been ripped off, but the amount of damages you’ve suffered is relatively small, less than $3,000?
You go get an attorney, right? Wrong. You won’t find an attorney to handle cases in this range unless an attorney decides to help you as a favor or “pro bono.” Why not? Because it is a time-consuming task to open a case, file it, prepare for trial and represent a consumer in a trial. It can take dozens of hours to get a decision in the trial court, and then the defendant, who is often represented by a high-priced attorney, can appeal the case, delaying the result for another year.
The net result is that consumers who have been ripped off for less than $3,000 (and, actually, much greater amounts too) will have only one real option to litigate their claim: at the small claims court where they will represent themselves. There are dangers to representing one’s self, though. If you go to small claims court, you could end up facing a defendant’s attorney who hands the judge complicated legal documents and makes arguments that confuse you, but could kill your case.
Attorneys bear large overhead. They need to pay their office rent, secretaries, insurance, court fees and many other expenses. They are in the business of making a profit, just like everyone else. They can’t afford to make it a practice to take cases that would be a net loss to them. If they did this on a regular basis, they couldn’t pay their own bills and they would go out of business. Many attorneys do occasionally handle cases pro bono, but not in great quantity.
There is one other possibility. Some cases can be handled as class actions (or class arbitrations), but merchants have been inserting class action prohibitions into their contracts. I’ve been working hard to fight these provisions, because a class proceeding is often the only way to get any relief for a consumer who has been cheated. We’ve had some success in these cases (here’s a summary of one success story), but there is a long way to go. As I’ve written before, the federal government needs to step in and pass the Arbitration Fairness Act.
In the meantime, I’m writing this post to advise you about the sad situation where you are ripped off for an amount that is less than a few thousands dollars, even when it is clear that you were victimized. The bottom line: You won’t be able to find an attorney to represent you.
The above video features Bernard Brown, a highly respected attorney who has been practicing consumer law in the Kansas City area for about thirty years. Mr. Brown is well-known for his work suing automobile dealers for fraud, as well as handling class actions and other consumer cases. The following is testimony is from a video deposition of Mr. Brown in a case that I brought against a payday lender who had prohibited class actions and class arbitrations. The payday lender argued that each of the many thousands of customers (we had alleged that they had all been ripped off for about $1,000) had to find his or her own attorneys and bring their cases individually.
As you can see in the video, Mr. Brown explains that this position is absurd, because victimized customers (certainly almost all of them) would never be able to find attorneys to represent them for damages in this range. In the second part of this video, Brown explains the economics of handling a “small damages” case, even when that case shows that the business is clearly at fault.
My thanks go to Bernard Brown for his permission and encouragement to post this video.
I've had numerous occasions to be thankful for lawyer friends who write out something quick for me – that legal letterhead gets things done a lot faster than the pit-bull approach. (Almost a year with Smart Carpet, and still no satisfaction from Maytag on two issues!) I hate spending money on almost everything nowadays, because it so frequently involves a second trip to the store and an even longer wait to get a satisfactory refund or exchange on the item than it took to purchase it. It's almost as if manufacturers are planning on consumers not being able to fight as permission to sell shoddy products. It's not the small-ticket items, either – I'm on my third dishwasher in 4 years in this house, and it's already had repairs twice since January. It's like offering rebates instead of coupons. Once people got home with the paperwork and realized they had to go out and make copies, or release too much personal information, or send in forms crucial to later repairs or replacements, most of them opted out. The sellers were able to get their sales up with a pretend discount that they never actually had to give out.
Even if the attorney take the case pro bono, there are other expenses beyond the attorney's control like filing fees and court stenographer fees and research expenses.
All of which favors the businesses that want to cheat the consumers
I was advised by an attorney during a free consultation concerning a $2,500 case against a contractor that I couldn't afford to sue. It would cost more than $2,500 in various fees to sue. And even if I won the case, there was not way that the judgment could be enforced.
Erich, there are procedures in many states where an attorney is not even required. Some attorneys may even assist claimants in smaller consumer cases in Small Claims Courts or use statutes which allow the Court to award attorney's fees, costs and sometimes more.
In Missouri, small claims may be handled via the Small Claims Court which neither requires claimants to have an attorney nor applies the normal rules of evidence. You get a Small Claims Handbook free from the Court which outlines procedures. You can generally keep track of the progress of your case(s) on-line at:
https://www.courts.mo.gov/casenet/base/welcome.do
Generally, in the Missouri Small Claims Court if you have an affidavit of a person who would testify to a fact in Court, it may be used by the Court in deciding the case. Estimates without witnesses may be generally be used in repair cases, and generally only you have to apear to testify. If you win a judgment, the other side has 10 days to file for another trial, or the judgment is final. In the new trial of your case, the normal evidence rules generally apply and an attorney is probably a very good idea. Collection may be an issue but, at this point you may want to refer the matter to a qualified collection attorney, or file the garnishment/execution papers on your own at a minimal cost.
I have handled many of these small claims cases for an initial flat fee of $500.00 which is less than one-third of the $3,000.00 total which is he maximum you may sue for in Missouri Small Claims Court. I try to place all the cases on a single docket day so as to minimize appearances by myself and clients. If we lose, we may also file for another new trial but, that costs another $500.00. If we win, and the other side files for another trial, I charge another $500.00 for a total fee of a maximum of $1,000.00 or one-third the $3,000.00 maximum. Costs are paid by the client. Any appeals or extra-ordinary remedies cost extra.
In many cases, it makes sense to file in Small Claims Court because you usually get a trial within a month of filing your case, other courts may take many months or years to try your case.
In some other cases, the Missouri Merchandise Practices Act may provide smaller claims consumers a remedy where we may sue for a smaller amount but, ask for attorney's fees, costs, and even punitive damages. The MMPA does require a filing fee, service costs and may have other expenses but, usually these are less than $500.00. In these types of cases, I will accept an initial payment of $500.00-3,000.00 to be credited against any other fees earned in the case, if any.
There are lower cost alternatives for consumers to have access to the courts but, you have to search for them. Or read DI.
Timothy Hogan
Attorney at Law
314-909-5656
Tim is a rare bird, based on everything else I've heard and seen. It is extremely difficult to find attorneys who are willing to commit to a trial for an amount that is feasible in low damages case. I hadn't considered, however, the possibility of having an attorney going into small claims suit on behalf of a plaintiff.
Yes, the plaintiff doesn't need to have an attorney to use small claims court. Almost none of the people using small claims court show up with an attorney. My point is based on that assumption, coupled with my warning that the Defendant might nonetheless show up with an attorney, thereby tipping the scales.